What's a fair price (I'm the buyer here :>) and anything else I should look for?

I'm in California. The car was drive cross country from Massachussets. I saw the car, but didn't get the opportunity to test drive it.

white 240 DL wagon
181,783 miles
automatic with overdrive (overdrive doesn't work)
roof rack (cheap factory type)
leather interior, very very torn driver's seat
brake pedal has no signs of wear
no leaks apparent inside
power locks
passed smog 3 months ago
He originally asked $1700. No buyers for 3 months. Had mechanic's inspection by one buyer that revealed overdrive doesn't work; seller says car never had overdrive but I saw the little black button on the shifter knob that tells me an overdrive exists
selling because he doesn't need a car anymore (takes bus to work)

problems:
overdrive doesn't work
driver's door handle doesn't work from outside
AC doesn't work
wagon rear latch springs are broken
needs new struts in front
rust on the differential and front muffler
brakes 5% in front, 60% in rear
"valve cover leak"
needs "tune up"
dashboard lights don't work
gas cap cover missing (the square metal flap that covers the fuel cap)
driver's door trim is bent

So, what price should I offer? Anything else to be wary of?